Strategies every start-up and small business can take from Apple, Facebook, Google, and other leaders in high tech.
Looking to model your startup or small business after the tech industry's titans? It's not just about cutting-edge technology. Following are five key practices that any company can steal from the most successful gadget, app, and software makers alike.
1. Perpetually prototype, update, and refine
“Good enough” is the new “perfect” and constant iteration the norm at social game maker Zynga. Games like FarmVille and Adventure World became smash hits, in part, through continual tweaking and enhancing based on user analytics. On-the-fly iterations let you quickly gauge consumer behavior and react accordingly. Plus, smaller-scale, rapid launches are much easier (and less risky) to pull off than big launches that involve loads of features.
2. Give it away free and then upsell
From Spotify to Dropbox, Amazon Cloud Drive to Pandora, the smartest thing many of today’s high-tech leaders do is let you steal their software. These so-called “freemium” offerings minimize user friction by making products free to download and install. Advanced features and add-ons are then available for purchase or subscription. Paired with sticky experiences that prompt ongoing interaction (regular news delivery, streaming music, etc.), the practice promotes constant brand awareness. Some big spenders may even pay many times over what they would on a single-shot retail purchase. Be forewarned, however—conversion rates often dip as low as 2-3%, making volume plays essential here.
3. Open up
Apple did a lot of things right with its App Store. But its real success can be attributed to thousands of enterprising external software developers. The lesson here: Rather than lording over proprietary solutions, sometimes it pays to empower end-users, and provide more open platforms and solutions.
4. Change, reinvent, and add ongoing value
The real fuel behind Facebook’s meteoric growth? A constant willingness to invent and reinvent features that boost opportunities for interaction. Every Facebook update is designed to improve its virality and provide the company with more data about users' habits, which in turn improve the user experience and targeted ad placements. If your business isn’t taking steps today to learn from your customers and evolve accordingly, you won't be ready to compete tomorrow.
5. Design to monetize
The days of idle tinkering are over: In competitive markets, every product and service offer must add tangible value. That means you must be brutal—and brutally objective—when assessing new concepts. If your customers won't buy it, don't do it. And figure that out as early in the process as you can using prototypes or other tests in the marketplace.